Last October, Sprint announced a $15.5 billion four-year deal to carry Apple's iPhone and keep pace with its larger competitors who already had subscribed millions of users. That deal, a commitment to improving smartphone services through a program called "Network Vision," and a multi-billion dollar 4G built with Clearwire are Sprint's focus for 2012 and 2013, after it walked away from a $7.3 billion acquisition of MetroPCS (NYSE:PCS)
While Moffett hedged his predictions in March and is now withdrawing from bankruptcy talk, his maintenance of an underperform rating on Sprint reflects wider industry concerns -- mainly whether the launch of the iPhone 5 will disrupt what has been a banner year for telecom profits and margins.
A cycle of upgrades to the iPhone 5 -- subsidized by carriers like Sprint, Verizon, and AT&T -- may cut at industry margins. Meanwhile, an expected surge in data loads may differentiate strong networks from the weak, undercutting the attractiveness of unlimited data plans.